US agrees to pay Anchorage $180 million to settle decade-long Port of Alaska lawsuit

By THE ALASKA STORY

July 8, 2026 – The federal government has agreed to pay the Municipality of Anchorage $180 million to resolve a decade-long lawsuit over the failed Port of Alaska expansion project, bringing to a close one of the state’s largest and longest-running infrastructure disputes.

The settlement, announced Tuesday by the US Department of Justice and the Municipality of Anchorage, ends Municipality of Anchorage v. United States, a case that has been pending in the U.S. Court of Federal Claims since 2014.

Under the agreement, the United States will pay $180 million to the municipality in exchange for dismissing all claims related to the federal government’s alleged responsibility for the failed port expansion project.

The Port of Alaska is the state’s primary cargo gateway, handling roughly 90 percent of the consumer goods that enter Alaska and serving as a critical logistics hub for Joint Base Elmendorf-Richardson and other military operations.

Acting Attorney General Todd Blanche said the settlement allows both sides to move beyond years of litigation and concentrate on strengthening the state’s most important maritime facility.

“I was honored to visit the Port of Alaska today to announce this settlement,” Blanche said. “Reaching this fair and reasonable resolution allows both parties to move beyond many years of litigation and instead focus on what matters most: modernizing and beautifying the Port of Alaska, while lowering costs for consumers.”

The lawsuit stemmed from the failed Port of Anchorage Intermodal Expansion Project, an ambitious modernization effort launched in the early 2000s. The project encountered significant engineering and construction failures that left much of the work unusable and resulted in hundreds of millions of dollars in additional costs.

Anchorage alleged that the federal government, through the US Maritime Administration, bore responsibility for the project’s failures because of its oversight and management of the expansion. The United States disputed many of those claims, and the litigation stretched on for more than a decade.

Rather than continue years of additional courtroom proceedings, both parties agreed to settle.

According to the Justice Department, the agreement reflects a shared recognition that continued litigation would consume significant public resources while delaying efforts to improve the port for future generations.

Associate Attorney General Stanley Woodward said the settlement represents a practical resolution.

“Settlements such as this one reflect a reasoned judgment that certainty and public resource conservation are of greater value than another decade of litigation, which would detract from taxpayer resources and personnel focusing on the Department’s top priorities,” Woodward said. “Bringing this litigation to a close also creates a welcomed opportunity for collaboration among federal, state, and local partners to better support the long-term functionality and economic vitality of the Port of Alaska for the benefit of the American people.”

The Port of Alaska Modernization Program is already underway to replace aging infrastructure and ensure the port remains operational in the event of earthquakes and other disasters. State, local and federal governments have all contributed funding to the effort, recognizing the port’s importance to Alaska’s economy and national defense.

This is a win-win-win. The Don Young Port of Alaska is a vital piece of infrastructure for our state and the nation. This settlement lets us turn the page and puts real resources toward rebuilding the Port,” Gov. Mike Dunleavy said. “This is another example of what happens when President Trump’s administration, the State of Alaska, and local leaders pursue partnership over conflict. President Trump has made it clear that he knows Alaska is strategically important to the country. I’m grateful for everyone who helped to get this done.”

The $180 million settlement is expected to provide a significant infusion of funding as modernization continues.

The Justice Department said ending the litigation allows both the federal government and the Municipality of Anchorage to redirect their attention and taxpayer resources toward ensuring the Port of Alaska continues serving Alaska’s residents, businesses and military installations for decades to come.